A HUD review of Knox County Community Development Block Grant and other programs requested by Mayor Mike Ragsdale in August has been completed and a report of HUD's findings has been submitted to the mayor's office.

The report "commends the county for employing a knowledgeable staff and for a commitment to carrying out worthwhile activities," and also commended the County "for good programmatic monitoring of sub recipients."

The report did, however, find actionable issues involving:

• Possible conflicts of interest relating to the CDBG program

• Problems with KCCD and Knox County PBA employees time sheets used to allocate administrative costs among programs

• Failure to include a "reversion of asset" related to a subrecipient agreement with the Tennessee Conference of Community Development

Other areas of concern included:

• Lack of progress in the HOME affordable housing program and "inconsistency of the PBA to provide consistent and experienced management of the Knox County Rehabilitation Program"

• Concerns regarding separation of duties and having proper checks and balances in place

A total of $33,454 in questioned funding was disallowed, and another $840,000 is under further review. HUD's summary letter of findings can be found here.

The mayor's office says they are taking steps to address these issues. The HUD report noted that Knox County officials did not appear to have "adequate knowledge of the CDBG and HOME conflict of interest requirement" and that they would review the county's response in relation to the disallowed funding.

The mayor's office has prepared the requested conflict of interest documentation, a copy of which can be found here.

Great timing! Release the report the Friday before Christmas when it will draw as lttle immediate attention as possible. The HUD letter says the review was completed on Nov. 9, more than six weeks ago.

The full report was not posted. The summary letter, though, indicates that the $33K is disallowed funding related to the actionable findings (the first three issues listed), and the $840K is related to the questionable findings (the other issues listed).

The funding related to the second list of items is still under review as I read it. The funding related tothe first list of items is formally disallowed unless the county makes a case. The filing of conflicts asking for exemptions is apparently part of (or all?) of the count's case on those funds.

The last 3 points in the 'public disclosure of conflict' do not show if there was an overlap in time of when the organizations got the money and the county employees were on the boards of the organizations.

For example, in the 5th point, was Barbara Cook on the board of Senior Citizens Housing Assistance Services when they got the money? It doesn't say. But in the 2nd point, it says that group got money in two specific years and Cindy Finch was on the board in those same two specific years.

The disallowed amount of $33,454 is almost certainly the single Fam-Sec grant, the "glorified babysitting service" referenced in the August Knoxviews thread Randy links. That's the one I likened to "bad debt" even that far back, albeit at an apparently acceptable level relative to the total grant budget.

I'm not clear as to what the $840,000 that is "subject to further investigation" comprises. On first read, I expected to find that the itemized list of five conflicts (after disregarding the sixth conflict, Fam-Sec) totaled that amount. When I added the five conflicts, though, I found they total $1,017,000, so I'm stumped.

If we're to make anything of the sequence in which Brezina lists violations/possible violations in his letter, he lists those conflicts first. However, it certainly sounded to me that he is allowing staff (Finch, the mayor, and five other current or former county employees)to go back and collect the documentation HUD needs in order to waive any charge of violation(s).

The second and third violations/possible violations, relating to the need for employees to prorate their time between projects and the need to obtain this "reversion of asset provision" from grantees, involve amounts I had difficulty discerning, so I feel like I lack a sense of the "scale" of that problem...